Somerset officials eagerly await delivery of $3 million state check

Thursday

SOMERSET — The expression "the check is in the mail" might have a new level of meaning in this cash-strapped town.

That includes a check from the state for $3 million.

Two local legislators said those funds, approved last summer to help the town offset dramatically declining revenues from the Brayton Point power plant, will be hand-delivered today.

"The Department of Energy Resources has cut the check," state Sen. Michael Rodrigues, D-Westport, said on Thursday afternoon.

State Rep. Patricia Haddad, D-Somerset, the House's speaker pro tempore, said the same thing.

"I learned yesterday the check was ready. We are hand-delivering it," Haddad said.

She said there were some questions about whether it should be wired to the town.

The source of the funds is the Regional Greenhouse Gas Initiative Auction Trust Fund, which is meant to provide "one-time reimbursements" for communities negatively affected by declining property revenues from its coal and oil power plants.

While the town of Salem received funds under the RGGI pact when Salem Harbor closed, Rodrigues said this was the first time the state legislated the funds for a fossil-fuel power plant that had remained open.

Through Town Administrator Dennis Luttrell, Somerset has been working for several months with state officials to obtain the funds set aside for this purpose.

With the town unable to have its tax rate set, a prerequisite for mailing out tax bills for this quarter, and with selectmen voting Wednesday night to borrow $9.3 million to pay bills, a cash infusion of $3 million should be reason to celebrate.

While Luttrell has been updating officials about the expected proceeds, Selectman Scott Lebeau and board Chairman Donald Setters said the administrator told them Thursday morning that the $3 million check actually came earlier this week.

There was just one problem: "The check came registered mail and the treasurer sent it back. She wouldn't accept it," Setters said Luttrell told him.

Lebeau said the same thing, based on information from Luttrell.

"What I was told was the check came certified mail and the treasurer refused to sign for it," Lebeau said.

"Absolutely not. Totally untrue," Treasurer Kathleen Trafka said.

"The state never issues paper checks.

"They never came to my office, and we get certified mail just about every day for different departments, and we always sign for them," Trafka said.

Trafka, an elected official who's been in the hot seat for months because she has not reconciled cash balances in order for the state Department of Revenue to set the tax rate, said she "knows nothing about the schedule of delivery" of the $3 million check.

Two phone calls left for Luttrell on Thursday night at his home were not returned. He does not provide a cellphone number for town use.

The third selectman, Patrick O'Neil, could not be reached for comment.

"I have no idea," Lebeau said about Luttrell's assertions and Trafka's denial.

"It could be anything," he said. "I will check into it."

Both Lebeau and Setters said they envision the $3 million being used in the town stabilization fund to bolster those reserves and lessen the impact of raising taxes next year. It's a foregone conclusion they will increase significantly.

The stabilization fund has about $7 million, and an overlay account set aside mostly for Brayton Point abatements has about a $2 million surplus, Lebeau estimated.

Setters said preliminary budgeting for next year includes using $2 million of those funds to offset impacts on taxpayers.

When Secretary of Energy and Environmental Affairs Richard Sullivan met with Somerset officials in August to explain funding sources to help them, the town learned it must complete a tax treaty with Brayton Point owners in order to satisfy provisions for the RGGI funds.

As part of that Payment in Lieu of Taxes (PILOT) agreement, reached in October, the town returned $3.5 million for negotiated overpayments in taxes to the power plant owners, and set the current and subsequent fiscal year tax payments for Brayton Point.

Under that agreement, the $13,437,550 Brayton Point LLC paid in fiscal 2011, the last year of a 10-year PILOT agreement, drops to $7 million in fiscal 2014, to $5.5 million in fiscal 2015 and $4.25 million in fiscal 2016, which ends on June 31.

Sullivan had told officials the $3 million infusion was intended to help pave "a glide path" to ease the tax burden.

"That's why it was so important to have the PILOT agreement," Lebeau said.

On a positive note, he said, "Any money we get right now is welcome news."

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